Redstate

Posted at 5:25pm on May 8, 2008 The GOP--On The Right Side Of The Trade Issue

And That's Not Just A Pun

By Pejman Yousefzadeh

In the event that people think the debate over free trade is smallball in this election cycle, let me note that in fact, the issue is attracting a whole lot of attention--and for all of the correct reasons; what we do in terms of formulating and implementing trade policy will have a tremendous impact on our economic growth, or lack thereof.

To that end, I want to direct reader attention to this and this, both of which show that trade policy is going to be a special focus of attention for the GOP come this fall. This is a good thing; Republicans are not backing down in the face of protectionist demagoguery. Quite the contrary, a pro-growth, pro-free market, pro-opportunity message is being spread that is in the best traditions of the Republican Party.

I don't feel like being reminded of Smoot-Hawley. I know that you don't either. And if we work hard enough in this upcoming election cycle, we won't be.

Posted in Economy | Free Trade | Protectionism — Comments (9)/ Email this page » / Read More »

Posted at 1:28am on May 8, 2008 It Cannot Be Stressed Enough

By Pejman Yousefzadeh

Both Hillary Clinton and Barack Obama are the most protectionist major Presidential candidates to come down the pike in recent memory. I say "recent" because, of course there is one particular President who was in the same league with both Clinton and Obama when it came to promulgating lousy trade policy and making the country suffer for it. I know that Charlie Black works for the McCain campaign and gets paid to throw elbows, but he is right to go where he goes verbally:

The growing shopping list of promises has also served further to sharpen the contrast with John McCain, the Republican nominee, who has staked out a robustly free-trade stance for the general election.

"The last time we had a protectionist president was Herbert Hoover [in office from 1929 to 1933] and look how that worked out," says Charlie Black, a senior adviser to Mr McCain. "We think we can win this debate in a general election."

The ghost of Hoover may be smiling now. The ghosts of Hawley and Smoot most certainly are. The rest of us have every reason to feel grim.

Posted in 2008 | Barack Obama | Economic Antediluvianism | Free Trade | Hillary Clinton | Protectionism — Comments (3)/ Email this page » / Read More »

Posted at 12:31am on May 7, 2008 If Pandering Is The Game . . .

By Pejman Yousefzadeh

It is generally agreed by those who are actually in the know when it comes to the specifics of trade policy and how free trade genuinely benefits America that both Barack Obama and Hillary Clinton are moving Heaven and Earth to pander to protectionists for votes. But as Daniel Ikenson points out, in the runup to tonight's primaries in Indiana and North Carolina, both pandering to free traders is the smart thing to do:

According to the U.S. Department of Commerce, Indiana's producers shipped $26 billion worth of goods to foreign customers in 2007 -- 14 percent more than the year before, and 80 percent more than in 2001. In fact, since 2001, the state's exports have grown at a rate one-third faster than U.S. exports overall. In North Carolina, producers shipped $23 billion worth of goods to foreign customers in 2007 -- 10 percent more than the year before, and 59 percent more than five years ago.

In 2007, exports accounted for 20 percent of U.S. manufacturers' total sales revenues -- the highest percentage in modern history. And nowhere in America is manufacturing more important to the economy than in Indiana, where the sector accounts for over 30 percent of the state's gross domestic product. Manufacturing is also more important to North Carolina's economy than it is to most other states, accounting for 22 percent of the state's gross domestic product, ranking it fifth among states in that measure.

In China, Canada, and Mexico -- the primary villains in the candidates' anti-trade narratives -- Indiana's producers are building relationships that are yielding extraordinary returns. Exports from Indiana to China increased by a whopping 36 percent between 2006 and 2007 -- twice the rate of total U.S. export growth to China, and nearly four times Indiana's exports to China in 2001.

Likewise, Indiana's exports to Canada and Mexico have grown 9 percent from 2006 and 67 percent from 2001, eclipsing overall U.S. export growth to the NAFTA countries in both periods. North Carolina's exports to NAFTA have grown 46 percent over the past five years -- to $7.4 billion.

Read on . . .

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Posted at 10:48pm on Apr. 28, 2008 Free Trade And Its Effects On The Economy

By Pejman Yousefzadeh

While it is fashionable to say that free trade policies are responsible for just about every negative thing that is currently going on with the economy--not to mention also being responsible for the reason certain adolescents are unable to get dates for the prom--the facts tell us something different. I have said before and will say again that while there is no economic silver bullet, free trade is as close to a silver bullet as anything there is. That we are turning our backs on a policy that has brought us a tremendous amount of prosperity with very little attendant cost is nothing short of bizarre and appalling.

I still dream of a world where bloggers don't have to constantly bring this sort of thing up and where the mainstream media will take the lead in challenging--and calling on the carpet--candidates who trash free trade and all of the good that it does just to get votes. I keep hearing that this is supposed to be a tremendously important election. Someone will have to explain to me, therefore, why it is that the mainstream press seems all too willing to allow candidates in this tremendously important election to demagogue a tremendously important issue. Are journalists too incompetent to challenge people like Hillary Clinton and Barack Obama when they rabble-rouse on the issue of free trade? Or are they just not courageous enough to act on what they know to be true?

Posted in Economic Antediluvianism | Economy | Free Trade | Protectionism — Comments (11)/ Email this page » / Read More »

Posted at 2:30am on Apr. 28, 2008 Free Trade: The Courageous And Correct Approach

By Pejman Yousefzadeh

The responsible thing for Presidential candidates to do when it comes to trade policy is to be in favor of free trade and reduced--if not eliminated--trade barriers.

Dominic Lawson shows that when it comes to trade policy, Barack Obama shows no hint of political courage and that conversely, John McCain shows no absence of it:

Barack Obama has lost it. Not the Democrat nomination - he remains the favourite in that increasingly bitter battle; no, what he has lost is the aura of invincible charm which had hitherto repelled all incoming fire, like some invisible force-field.

That has disappeared with the publication of his remarks to a private dinner for wealthy Democrat donors in San Francisco about his difficulties in attracting support from the blue-collar vote in the de-industrialising Midwest. That sophisticated audience laughed - it's on tape - when he told them how such people found it hard to buy the message of "a 46-year-old black man named Barack Obama".

Oddly, it was not this explicit imputation of racism against people whose votes he had failed to capture which has caused Obama the biggest problem. It was his follow-up remarks: "They get bitter, they cling to guns or religion or... anti-trade sentiment as a way to explain their frustrations".

The most extraordinary thing is that Obama has actually been pandering to the "bitterness" he identified - the "anti-trade sentiment". In the rust belts of Ohio and Pennsylvania the Senator from Illinois has lost no opportunity to blame America's economic woes on the free-trade treaty with Canada and Mexico (Nafta) - which had been enacted by President Clinton.

Obama is one of three Congressional sponsors of "The Patriot Employer Act", which seeks to give preferential tax status to American companies that choose not to invest overseas. His anti-globalisation rhetoric goes far beyond criticism of free-trade deals such as Nafta. Obama told voters in New Hampshire:"I would stop the import of all toys from China". China supplies 80 per cent of the toys sold in the US, so that's one heck of a pile of embargoed fluffy bunnies.

Obama's electoral calculations, at least, are rational: recent polls suggest that three quarters of voters believe that international trade has "made things worse for Americans". So as not to appear "protectionist" - perish the thought - Obama graciously concedes that "not every American job lost is due to trade". Not every job? The true figure - according to the apolitical US Council of Economic Advisors - is that only 3 per cent of US job losses can be attributed to "outsourcing".

Other figures which are never discussed are those measuring the "insourcing" of jobs, when companies from foreign countries have invested in the US. The value of those investments has been staggering - the biggest secret in a debate conducted (at least in the Democrat primaries) at a shocking level of ignorance.

The two Democrat candidates have made frequent attacks on the multi-billion dollar US trade deficit with Canada and Mexico: what Mrs Clinton and Mr Obama never acknowledge is that almost 95 per cent of the growth in that deficit since 2000 is entirely attributable to oil and gas imports. Are they seriously suggesting that America would be better off buying oil from countries without preferential trade status, such as Chavez's Venezuela or Ahmedinejad's Iran?

Read on . . .

Posted in 2008 | Barack Obama | Free Trade | Hillary Clinton | John McCain | Protectionism — Comments (1)/ Email this page » / Read More »

Posted at 1:04am on Apr. 26, 2008 Guess Who Is In Favor Of Free Trade Agreements With Latin America

By Pejman Yousefzadeh

Behold. And relatedly, see this.

Heckuva job, Pelosi.

Posted at 11:50pm on Apr. 24, 2008 On Whether Poisoning The Well Can Sometimes Be A Good Thing

By Pejman Yousefzadeh

Nick Kristof is comparing Democrats who oppose a free trade deal with Colombia with George W. Bush. If this is what it takes to break the Congressional logjam over the trade deal, then I am all for it. Of course, the end result may merely be that the New York Times will get a lot of "how dare you compare me with that man!" e-mails, so this plan isn't really foolproof.

Posted at 4:38pm on Apr. 18, 2008 If You Are A Protectionist . . .

By Pejman Yousefzadeh

The Chinese will love you. And why not? If the Chinese are seen as a reliable trading partner and the United States is not, then China will likely beat the U.S. to being able to access markets around the world.

I certainly don't begrudge the Chinese as they try to do well in the field of international trade. But I certainly begrudge American "leaders" who apparently are bound and determined to have us unilaterally disarm and retreat behind protectionist walls--reconciling ourselves to less and less prosperity in the process.

Posted in Economic Antediluvianism | Economy | Free Trade | Protectionism — Comments (17)/ Email this page » / Read More »

Posted at 10:47pm on Apr. 17, 2008 I'll Make This Short And Sweet

By Pejman Yousefzadeh

Hillary Clinton accuses Barack Obama of being excessively pro-free trade.

Meanwhile, Barack Obama accuses Hillary Clinton of being excessively pro-free trade.

And while all of this goes on, world trade growth suffers:

World trade growth declined sharply in 2007 and is expected to slow further this year as financial turmoil and rising commodity prices further depress global economic activity, the World Trade Organisation said on Thursday.

Preliminary estimates suggest the volume of world trade rose 5.5 per cent in 2007, down from a robust 8.5 per cent in 2006.

Based on the latest gloomy global output forecasts by the International Monetary Fund, the WTO says trade growth this year could slip to 4.5 per cent, the lowest since 2002.

The candidate who can work to reinvigorate world trade will be the one who helps implement policies designed to bring about greater prosperity. Too bad that Clinton and Obama are too busy trying to define themselves as the anti-prosperity candidate.

Posted in Barack Obama | Economic Antediluvianism | Economy | Free Trade | Hillary Clinton | Protectionism — Comments (2)/ Email this page » / Read More »

Posted at 12:37am on Apr. 16, 2008 The Consequences Of Ditching The U.S.-Colombia Free Trade Agreement

By Pejman Yousefzadeh

As this article points out, it is going to be a whole lot harder to pursue an agreement in the context of the Doha round of multilateral trade talks now that fast-track authority for the U.S.-Colombia trade deal has been derailed and the deal itself has been put on the backburner indefinitely.

Incidentally, it is laughable to suggest--as the article quotes some as suggesting--that the real problem here is that the Bush Administration sought to craft a bilateral deal with the Colombians rather than paying exclusive attention to multilateral talks. My understanding was that the United States government could walk and chew gum at the same time and that the trade consequence of this was that we could pursue bilateral deals while at the same time working to hammer out a multilateral accord in the context of the Doha round. But here, apparently, we are being told by those who are sympathetic to Speaker Pelosi's efforts to keep the U.S.-Colombia trade deal from being ratified that it is just not right for the United States to engage in bilateral diplomacy and create bilateral trade agreements--not even when these agreements open foreign markets to American goods.

Additionally, we are told that the Speaker's actions may have been justified and responsible because they prevented an outright defeat of the trade agreement on the floor of the House. I have to think, however, that the reason the trade deal was put on the back burner was because Speaker Pelosi and her cohorts are protectionists--or at the very least, they want to do a good enough impression of protectionists to ensure that Big Labor supports Democratic candidates this fall with full enthusiasm.

Posted in Democrats | Economic Antediluvianism | Economy | Free Trade | Protectionism — Comments (0)/ Email this page » / Read More »

Posted at 1:06am on Apr. 15, 2008 Trade Follies

By Pejman Yousefzadeh

Either Nancy Pelosi doesn't understand the nature of the U.S.-Colombia trade deal, or she thinks that she can fool the public. In any event, she makes a hash of things in trying to explain why she allowed for fast-track authority to expire--thus putting the deal on the back burner:

Democrats will vote on a free trade agreement with Colombia only after the White House and Congress address pressing domestic economic concerns, House of Representatives Speaker Nancy Pelosi said on Monday.

"We still believe it is possible to bring the Colombia free trade agreement to the floor under the proper circumstances, but first we need to address the worsening economy," Pelosi told reporters.

Earlier, President George W. Bush said the pact was "dead" until Pelosi scheduled a vote.

"This has to be done in recognition not only of the concerns that we have about human rights violations of workers in Colombia, but based on the economic security of America's workers here in our country," the California Democrat said.

"We ask the president to, once again, bring his people to the table so we can move forward," she said.

Administration officials said they have been trying for months to engage Pelosi in talks on bringing the pact to the floor for a vote, only to have their efforts ignored.

One does not know whether to laugh or cry. American markets are already open to Colombia products. The deal opens Colombian markets to American products. How American workers do not benefit from having another market opened to the things they make is beyond comprehension.

But of course, there are a lot of myths associated with the rejection of the trade agreement. And concerns about American workers and the environment are Pavlovian and come about with the advent of any trade deal, the facts notwithstanding. Robert Zoellick was right and while I hate to say that I told you so, I did.

Posted in Democrats | Economic Antediluvianism | Economy | Free Trade | Protectionism — Comments (4)/ Email this page » / Read More »

Posted at 9:57pm on Apr. 12, 2008 Speaking Of Hypocrisy On Free Trade

By Pejman Yousefzadeh

I give you Hillary Clinton:

Since 2001, Clinton has backed pacts with Jordan, Chile, Singapore, Australia, Morocco and Oman that were opposed by numerous labor, farming and environmental groups concerned that the deals contained insufficient safeguards for American workers and consumers.

As recently as November, Clinton supported a free trade agreement negotiated by the Bush administration with Peru.

Clinton's more recent critiques have cheered many trade critics, who long have complained that the pacts encourage companies to move jobs overseas.

But Clinton's campaign posture also has raised a few eyebrows. Lori Wallach, director of Public Citizen's Global Trade Watch division, a leading opponent of the structure of current trade agreements, said the New York senator apparently had shifted after getting "a lot of feedback from people across the country."

So she stopped being a free trader once she saw that it would get in the way of her political ambitions. Quelle surprise. I mean, one would never expect someone named "Clinton" to act like that.

Posted in 2008 | Economic Antediluvianism | Free Trade | Hillary Clinton | Protectionism — Comments (0)/ Email this page » / Read More »

Posted at 1:24am on Apr. 11, 2008 Another One From The "Prosperity Is Overrated" Department

By Pejman Yousefzadeh

The House voted to effectively kill the pending U.S.-Colombia free trade deal today. This was expected but no less appalling.

As mentioned before, Speaker Nancy Pelosi was the prime mover behind the killing of the deal. And she did so at the behest of unions. One trusts that those unions know they are responsible for the opportunity cost in prosperity terms when it comes to their own members.

Meanwhile, Dan Drezner goes through the reasons why the trade deal was a good idea. One quibble: Contra the good Professor, NAFTA has been quite beneficial for the American economy. And in response to Kevin Drum's point concerning agricultural subsidies and the need to decry them, he is quite right. But even if free traders fail to make this point, that doesn't mean that free trade ought to be held hostage. My doctor can tell me that I need to lower my bad cholesterol by changing my diet. I will listen to that advice even if my doctor fails to mention the need for me to get as much exercise as possible in addition to changing my diet.

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Posted at 11:58pm on Apr. 9, 2008 That's All Right. We Didn't Like Prosperity Anyway.

By Pejman Yousefzadeh

Now that the Bush Administration has made clear the need for a free trade deal with Colombia--one that opens Colombian markets to American products (the reverse is already true) and one that demonstrates solidarity with Colombia in the wake of the country's recent military spat with Venezuela, I suppose it is only predictable that we have this:

House Speaker Nancy Pelosi (D-Calif.) said today that Democrats will seek to delay consideration of a trade agreement with Colombia, prompting the White House to accuse Democrats of threatening the next administration's bargaining power in trade talks.

Pelosi, who worked with the administration in crafting the Colombia Free Trade Agreement last year, said the House would vote on a rule change to freeze the clock on when it must consider the pact. Under the current provisions, the House has 60 legislative days to consider the measure after President Bush sent it to Capitol Hill on Monday.

Democrats instead want the trade deal considered as part of a broader economic relief package. Bush has rejected talk of a second stimulus package.

And well the President should. The first stimulus package was a bad enough idea. Now, we are going to go ahead and have a second one immediately after the first one? And we are going to hold up a free trade deal that could actually work to do it?

Let's all recall that one of the few bright spots of our economy is the export market. Indeed, American exports have basically helped keep the economy from completely sinking and if we have a mild recession, we will have exports to thank for its mildness. Now, with a chance to expand the export market still further--remember, the trade deal between Colombia and the United States will open Colombian markets to American goods--the Speaker of the House has basically decided to say "no thanks" and shoot the American economy in the foot.

What do we do next? Have a national "Let's All Down A Couple Shots Of Hemlock" Day? A couple of Speaker Pelosi's friends may well be on board with the spirit behind the proposition, if not the proposition itself.

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